In the Context of Insurance, What Does the Term Premium

question 76

Multiple Choice

In the context of insurance, what does the term premium refer to?

• A) the money received from the defaulting party
• B) the money paid to the insurance company
• C) the money paid to insured after an accidental damage
• D) the money paid to insurance brokers as fee

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Net Purchases

The total amount spent on purchases of goods for resale after subtracting any purchase returns, allowances, and discounts.

Operating Expenses

Costs associated with running a business's day-to-day operations, excluding the cost of goods sold.

Income Summary

An account in which revenues and expenses are summarized, used in the closing process to prepare the accounts for the next period.